Wednesday, November 12, 2014

AT&T will suspend plans to rollout out fiber connections under the regulatory uncertainty clears, said Randall Stephenson, AT&T Chairman & CEO, speaking at the Wells Fargo Technology, Media & Telecom Conference. The decision comes in direct response to President Obama's call this week for the FCC to regulate broadband Internet as a public utility.

Speaking to market analysts and investors at the New York conference, Stephenson said the President's proposal at least brings clarity in so far that it envisions an end-to-end government regulation from the backbone through the aggregation layer to the last mile connection and the content provider. Stephenson noted that prior to the President's announcement, FCC Chairman Wheeler had been working with multiple parties to see if existing rules could be amended to ensure the customer protections that the FCC wants. This path promised a near term resolution of the issues. Stephenson said the President's course of action, absent Congressional action, will not lead to quick resolution but only to further litigation over new FCC rules and thus market uncertainty. Stephenson estimates a 2-3 year period of legal wrangling and uncertainty if the FCC proceeds to write new rules.

Given the lack of regulatory clarity, Stephenson said it is difficult to proceed with its multi-billion dollar residential fiber projects while not know the rules under which these network will be governed. So AT&T will pause its rollout. Another project to extend LTE service to airplanes is also on hold.

In April 2014, AT&T announced plans go big with its rollout of residential fiber in major markets across the U.S. The company announced a major initiative to expand its Gigabit-capable fiber network to up to 100 cities and municipalities nationwide, including 21 new major metropolitan areas. The company is not changing its CAPEX guidance for 2014. The initiative will fall under Project VIP.

"AT&T U-verse with GigaPower" service is available in parts of Austin, Texas and rollouts were already pending for Dallas and Raleigh-Durham and Winston-Salem, North Carolina.

AT&T's list of 21 candidate metropolitan areas for new fiber rollouts includes: Atlanta, Augusta, Charlotte, Chicago, Cleveland, Fort Worth, Fort Lauderdale, Greensboro, Houston, Jacksonville, Kansas City, Los Angeles, Miami, Nashville, Oakland, Orlando, San Antonio, San Diego, St. Louis, San Francisco, and San Jose (including Campbell, Cupertino and Mountain View). With previously announced markets, AT&T now has committed to or is exploring 25 metro areas for fiber deployment.Earlier this week, President Obama issued a video urging the FCC to act now to reclassify consumer broadband service under Title II of the Telecommunications Act, setting a legal basis to create a new set of rules protecting net neutrality. In a statement, Obama said he believes the bright-line rules should include:

No blocking. If a consumer requests access to a website or service, and the content is legal, your ISP should not be permitted to block it. That way, every player — not just those commercially affiliated with an ISP — gets a fair shot at your business.

No throttling. Nor should ISPs be able to intentionally slow down some content or speed up others — through a process often called “throttling” — based on the type of service or your ISP’s preferences.

Increased transparency. The connection between consumers and ISPs — the so-called “last mile” — is not the only place some sites might get special treatment. So, I am also asking the FCC to make full use of the transparency authorities the court recently upheld, and if necessary to apply net neutrality rules to points of interconnection between the ISP and the rest of the Internet.

No paid prioritization. Simply put: No service should be stuck in a “slow lane” because it does not pay a fee. That kind of gatekeeping would undermine the level playing field essential to the Internet’s growth. So, as I have before, I am asking for an explicit ban on paid prioritization and any other restriction that has a similar effect.

Cisco reported first quarter revenue of $12.2 billion, net income on a generally accepted accounting principles (GAAP) basis of $1.8 billion or $0.35 per share, and non-GAAP net income of $2.8 billion or $0.54 per share, for the period ending October 25, 2014.

For Q2, Cisco is setting expectations for growth in the 4-5% range.

"We are pleased with our results and are very comfortable in our strategy to deliver innovative solutions which enable the next generation of IT and the Internet of Everything. This was our strongest Q1 ever in terms of revenue, non-GAAP operating income, and non-GAAP EPS," stated Cisco chairman and CEO John Chambers.

Some highlights for the quarter:

By geography, sales in the Americas were up 2%, EMEA up 6% while APJC were down 12% compared to a year ago.

Two major service providers in the U.S. have significantly slowed their orders, this impacted overall U.S. sales and Service Providers sales.

In routing, ASR 9K saw double digit order growth y/y .

Switching revenue grew 3% y/y…driven by strength in data center switching portfolio. The Nexus 9K has over 900 customers. Paying customer adoption of the APIC solution more than doubled. Record 600 new customers signed for Nexus 3K including several major Web 2.0 providers.

Cash and cash equivalents and investments were $52.1 billion at the end of the first quarter of fiscal 2015, compared with $52.1 billion at the end of the fourth quarter of fiscal 2014, and compared with $48.2 billion at the end of the first quarter of fiscal 2014.

Frank Calderoni is stepping down as CFO and will be replaced by Kelly A. Kramer, who is currently senior vice president, Business Technology and Operations Finance of Cisco.

Cisco currently has 72,247 employees, down from 75,136 a year ago.

In the quarterly conference call, John Chambers commented on the call by President Obama for the FCC to regulate broadband Internet service as a Title 2 utility, warning that uncertainty created by new regulation would cause network operators to slow or halt their broadband rollouts. Chambers said he supports FCC Chairman Wheeler's effort to create some compromise that lets operators make money while ensuring consumer protections.

Alcatel-Lucent unveiled a Virtualized Service Router (VSR) built on Intel silicon and implementing its Service Router Operator System (SROS) and managed by the 5620 Service Aware Manager (SAM).

The addition of an Alcatel-Lucent virtualized edge router running on x86 accelerates the industry's shift to network functions virtualization (NFV), enabling service providers to build more flexible infrastructure that scales with cloud technologies. Over 20 trials are underway with carriers and two contracts have already been won.

The virtualized router is positioned as an addition to the company’s routing hardware family. Alcatel-Lucent continues to develop its custom ASICs for powering the higher performance routers.

Alcatel-Lucent's Virtualized Service Router (VSR) will implement its full, non-stop routing code. Significantly, the company said it was able to optimize the code so as to deliver 2X the routing performance compared to other virtual routers on x86. The performance gains are achieved by leveraging parallel processing across multiple core on Intel's Xeon processors. Alcatel-Lucent has a development partnership with Intel. In data plane performance, the VSR is able to hit 160G throughput in a 2RU x86 server.

In addition, while others have focused on delivering one or two router virtual network functions, Alcatel-Lucent will deliver a suite of router applications. One of the first applications is a Virtualized Route Reflector, which the company says has achieved 8x the performance in the control plane over competitor offers.

VSR-SIM: The full IP-MPLS software-based router simulator. Available now.

VSR-PE: The Virtualized Provider Edge delivering Carrier Ethernet and IPN services. Available for demonstration now and commercially available during the first half of 2015.

VSR-AA: The Virtualized Application Assurance delivers application-based value added services and application-level reporting and traffic management. Available for demonstration now and commercially available during the first half of 2015.

VSR-SEGW: The Virtualized IP Security Gateway will be available for demonstration during the first half of 2015.

VSR-WLGW: The Virtualized Wireless LAN Gateway will be available for demonstration during the second half of 2015.

VSR-BNG: The Virtualized Broadband Network Gateway will be available for demonstration during the second half of 2015.

“There is lots of industry interest in NFV, and for valid reasons. With this announcement we can offer customers the best of both worlds; industry leading performance on accelerated hardware platforms as well as “quick turn-up” solutions running on standard hardware. This flexibility is key as the choices for which functions to virtualize and at what time will vary. And in many cases, both solutions will coexist. With our NFV, SDN and orchestration product suites we can help customers take advantage of any system choice on their schedule, and with complete compatibility,” stated Basil Alwan, President of Alcatel-Lucent’s IP Routing & Transport business.

In February 2014, Alcatel-Lucent and Intel announced a global collaboration aimed at accelerating the development and delivery of optimized virtualized cloud, wireless and IP Network Functions using Intel architecture. The companies said Network Functions Virtualization (NFV) appeals especially to mobile service providers now because it allows them to innovate more quickly and easily while providing the best return on their investments in an all-IP network infrastructure such as LTE. Specifically the expanded collaboration will focus on three areas:

Virtualized Radio Access Networks (RAN) portfolio, developing and optimizing Alcatel-Lucent’s LTE and LTE-Advanced wireless products. The solution will enable operators to use general purpose platforms in configurations that will reduce TCO and increase operators’ ability to scale networks to satisfy mobile data demand with rapidly changing devices and applications.

Cloud Platform, developing and optimizing Alcatel-Lucent’s CloudBand NFV platform including joint contributions to the Open source community and a push to accelerate service provider testing, validation and deployment of NFV technology and products.

High-performance Packet Processing for advanced IP/MPLS platforms and functions to enable Alcatel-Lucent’s IP development team the insights required to use the features and capabilities of Intel architecture to deliver improved performance in virtualized IP/MPLS functions.

The Nuage Virtualized Networks Services (VNS) solution could be used to provision and define IT services by leveraging policy-driven network automation and application-friendly abstraction.

Nuage achieves this by extending its Virtualized Services Platform (VSP) over both corporate WAN and Internet access bandwidth. VNS enables the creation of templates that describe and manage the workflow of network services for any combination of applications in any cloud, and at any location. The company said this automated network workflow delivers the right services, at the right time, to the right location, and ensures that it is error-free.

“With Nuage Networks VSP being increasingly recognized as the SDN platform of choice, the time has come for SDN to branch out beyond data centers, extending the capabilities of policy-based network automation and effortless connection to all business locations. Nuage Networks VNS can dramatically simplify the delivery and consumption of network services by and for the world’s leading enterprises,” stated Sunil Khandekar, CEO of Nuage Networks.

Nuage Networks VNS solution enables enterprises and service providers to define services with full control and visibility applied and managed over:

Any network with freedom of choice across on-net, off-net, and internet options

Any cloud with flexibility across private, public, and hybrid cloud options

Any form or deployment model with freedom of choice among open (x86) CPE platforms, software-based premise options, and hosted virtual CPE deployment models.

Nuage Networks VNS is in trials now and will be commercially available in Q1 2015.

Colt, which operates a next-generation network in Europe, agreed to acquire KVH, its counterpart in Asia-Pacific,for ¥18.595 billion (EUR 130.3 million) in cash. KVH is currently owned by FMR, FIL and associates.

Colt, which was founded in London in 1992 with funds provided by Fidelity Investments, has grown into a pan-European operator with a network spanning 47,000 kms. It operates metro networks in 42 European networks with direct fiber connections into 20,000 buildings. Colt has a city-based expansion strategy, targeting customers operating in information
intensive industries.

KVH, which was also founded by Fidelity Investments, is present in Tokyo, the world’s number one city economy, as well as Singapore, Hong Kong and Seoul; providing a platform in four of Colt’s target cities for expansion. KVH operates data centers across Asia, a global low latency network and metro networks in Tokyo and Osaka. Its managed IT and cloud solutions were developed by Colt. KVH has around 2,000 enterprise and wholesale customers. In revenue terms KVH is roughly 10% the size of Colt.

“I am pleased to announce our plan to acquire KVH. It is a growing business, largely focused on network and data centres in Asia. They have strong capabilities, a significant customer base and great assets, all complementary to our own. This partnership will enable Colt to offer our customers seamless solutions on a global basis and give us a solid platform for growth in Asia,” stated Rakesh Bhasin, Colt's Chief Executive Officer.

ABRY Partners, a leading private equity investment firm, has acquired a majority interest in KORE Wireless Group, which is a global provider of managed M2M communications services. The deal brings growth and acquisition capital that will allow KORE to execute on its mission to become the pre-eminent independent provider of broad-based M2M service solutions on a global basis.

As the first step in its broader strategy, KORE also today announced the acquisition, in an all-cash transaction, of RacoWireless, which also specializes in IoT/M2M connectivity solutions. The combined company will have offices in five countries and serve more than 3 million subscribers on behalf of over 1,500 customers using services in more than 110 markets around the world.

“We are standing at a historic inflection point in our industry where scalability and innovation are critical, and the financial partnership with ABRY delivers the capital and expert support necessary to rapidly develop the scale demanded by global customers in what has so far been a fragmented market,” said Alex Brisbourne, CEO of KORE. “Strategic acquisitions both in advanced connectivity and richer applications solutions are an important goal, as scale and global reach are of paramount importance to our large applications and enterprise customers. These customers seek to leverage new M2M technologies that enable more efficient, innovative, and in some cases, disruptive business models going forward”, he said.

KORE provides unified control and management for cellular and satellite network service delivery in more than 180 countries worldwide, using a range of technologies — including GSM, HSPA, CDMA EV-DO and LTE, as well as satellite services.

TelePacific has selected Overture's 6500 multi- service Ethernet service delivery platform to add power and agility to its Ethernet Ecosystem.

The Overture 6500 is a CE2.0 switching and aggregation platform for business and cloud services, wholesale access, mobile backhaul and metro infrastructure applications. It delivers Carrier Ethernet over any access method, including fiber, E-Access, copper, SONET, and TDM, with full resiliency.

TelePacific offers business customers Ethernet options that can be tailored to their requirements, delivering bandwidth from 1Mbps to 10 Gbps over the most efficient access for their individual needs. That Ethernet ecosystem includes more than 400 Enhanced Ethernet- equipped LSOs, more than 50,000 fiber-served buildings and extensive Fixed Wireless networks in California and Nevada.